How To Plan Your Home Loan Down Payment

Apply Now

Buying a house is one of the most fundamental goals for today’s generation. Today, there are many people who are planning to buy a house and are subsequently strategizing to arrange funds to fulfill their aspirations. The millennials, today, have already started to plan their purchase of their own homes a few years in advance. But buying an own home is a big financial responsibility and home loans play an integral role for first time buyers. Even after you have availed a housing loan, there is still a need to arrange for the down payment, which can be quite substantial. We, at Kotak Mahindra Bank offer you a range of flexible solutions with our home loans and other key features to make your home-buying process hassle-free.

So what’s a Down Payment and how it factors in your Home Loan?

A down payment is an up-front payment you make to purchase the home of your dreams. This portion of purchase price is paid by you (as opposed to borrowing). The initial payment is integral for getting your Home Loan approved, and has the power to influence your borrowing costs throughout the life of your loan. That is why it is imperative to thoroughly understand every detail on how home loan down payment works and choosing the right payment method that suits your financial lifestyle.

Financing your home down payment is of paramount value and we will help you strategize to fulfill your aspirations of your own home. Here are some methods which can help you plan your down payment in advance before applying for a housing Loan:

Saving from early age

The first and the foremost solution is to plan ahead and inculcate saving right from early age as it can immensely contribute in the long run. Methods such as mutual funds, recurring deposits, investment in gold, etc. are available to save your money. The down payment you make will have its effect when you apply for a home loan.

Set up a budget

In order to create wealth for your home loan down payment, sticking to a monthly budget is substantially integral. Assessing your finances so that you can save every month can assist in achieving your goal of owning your own home.

Asset & Investment liquidation

Liquidating or mortgaging your assets and investments is another good option to make a down payment for home loan. But care should be taken that you are financially secure for a while if this was your source of income earlier.

Provident Fund

You can also use your provident fund to finance the down payment for a home loan. EPFO has allowed contributory employees of the provident fund (PF) scheme to use 90 percent of their PF accumulations to make down payments to buy houses and use their accounts for paying home loan EMIs. However, there are few rules to be followed by a PF member to withdraw the amount to buy a real estate property.

Support of family & friends

Most of the times, home buyers don’t have large cash reserves. And if you have exhausted other resources, borrowing funds from your family or friends and repaying them once you have sufficient resources is a good option. Kotak Mahindra Bank understands your keen interest in fulfilling your dream of home and that is why we strive to provide for your housing needs.

Disclaimer: Terms & Conditions Apply. Credit at sole discretion of Kotak Mahindra Bank Ltd and subject to guidelines issued by RBI from time to time. Bank may engage the services of marketing agents for the purpose of sourcing loan assets.

Additional Read: First Time Home Buyer? 5 Steps to help you plan your financial goals effectively

Latest Comments